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Is India the worst performing housing market in the world?

LiveMint logoLiveMint 12-06-2014 Ravi Krishnan

Indian home prices are tumbling rapidly, says a study by the International Monetary Fund. Local home prices have shown the steepest annual decline among a set of 52 countries. That’s at odds with the rest of the world where prices are rising and the institution has raised an alarm over housing bubbles.

Graphic: Paras Jain/Mint Indian residential prices declined 9% from a year ago as high inflation has cut into consumption and elevated interest rates hit affordability of homes. The fall is worse than even Italy, Cyprus and Greece, the centre of euro area stagnation after the financial crisis.

Graphic: Paras Jain/Mint The Fund’s conclusions are in a way supported by local data even if the numbers are different. The National Housing Bank’s Residex data show that while home prices are still increasing in many towns, the pace is decelerating. An equal weighted index of 20 cities for which data is available shows home prices in the December quarter grew just 1.4%.

So, those text messages you are getting announcing a 10% to 15% discount on home properties may not be a selling gimmick after all. If only lower interest rates made the deal sweeter.

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